Whether you're driving a brand new Lexus, a five-year-old Honda, or the truly ancient Volkswagen Rabbit you've had since college, auto insurance is critical. Not only do most states require at least minimum liability in order for you to drive legally at all, but if you should get into an accident without insurance, you wouldn't be able to replace it.

When you are purchasing a brand new car, or renewing the coverage on a car you've only had for a year or so, your coverage choices are made for you, for the most part, because your finance company will require total protection. When you have an older car, however, there's a temptation to reduce your coverage. After all, you don't comprehensive coverage on a car that costs less to replace than you pay in premiums…do you? Still, there are a few things you should consider before stripping your insurance policy down to the legally-required minimums.

Protection for You and Your Passengers

Whether your car is old or new, cheap or extravagantly expensive, you need to be able to protect anyone who may be hurt in an accident. Health insurance may help, but auto insurance will protect you, your family, and any other passengers in your car.

Specifically, you need:

Personal Injury Protection, which is required in some states, but not available in others

Medical Payments Coverage, which will pay for medical care for you and your passengers

Uninsured / Underinsured Motorist Coverage, which will save your financial life if you're hit by someone without insurance.

Protection for Your Finances

In addition to coverage that will pay your medical expenses, you should have liability coverage in place, no matter how old your car is. This is the type of insurance that most states require, and it not only covers court costs, but also pays for damage to property or injury to people if you are at fault in an accident.

Liability insurance is especially important if you own your home, because a house is seen as an asset up for grabs should your accident spawn a lawsuit.

If you have only one kind of insurance coverage, this is the one to get.

What You Don't Need

While comprehensive and collision coverage are powerful when it comes to being protected from damage to your vehicle, if you drive a car that is older, or not of high value, you may want to drop this coverage and instead add options to give you benefits you might actually use. Some examples are:

Coverage for towing costs, should you be stranded.

Coverage for labor costs, should your car require repair.

An older car is an inherently beautiful vehicle simply because it is paid for, but keeping the right amount of insurance coverage, as well as the right kind, will make your family car far more financially efficient.